President Muhammadu Buhari recently signed the Nigeria Startup Bill into law much to the delight of industry stakeholders. The new act, which seeks to provide an enabling environment for technology-enabled businesses in Nigeria, has been described as a game-changer for the burgeoning startup ecosystem in the country.
BENEFITS OF THE ACT.
1. The Act will ensure that federal laws and regulations are clear, planned, and designed to work for the tech ecosystem. With the new Act, Nigeria’s tech ecosystem is expected to see an improved enabling environment soon.
2. The Act set up a Council known as the National Council for Digital Innovation and Entrepreneurship. The main function of the council is to ensure the monitoring and evaluation of the regulatory framework. It will also formulate and provide general policy guidelines for the realisation of the Startup Act’s objectives and give overall directions for the harmonisation of laws and regulations that affect a startup.
3. The Act will usher in a new era and set in motion new rules of engagement for the startup ecosystem. Crucially, it brings an end to some of the challenges that may have held the startup ecosystem back since its rapid rise within the last decade.
4. It marks as one of the most historic pieces of legislation in Nigeria, as it positions the startup ecosystem to thrive through its targeted provisions. These policies, collaborative in their making, will now guide the operations of startups in Nigeria.
5. It gives legal backing to both the sector and the players in the ecosystem.
6. It ensures the protection of young Nigerians that are coming up with innovative ideas without the requisite knowledge of dealing with international investors.
7. The offer of incentives such as tax holidays will allow startups to scale up without the burden of taxation in their formative years.
8. It establishes the Startup Investment Seed Fund, which is designated for startups alone to provide finance and tech relief for startups. This means increased access to funding that will grow the startup ecosystem. To this end, it will be easier for startups to fund their operations by leveraging the grants and loans that will be available to them.
9. Companies labelled as startups under the act are eligible for pioneer status incentives and other tax reliefs.
10. Also, companies labelled startups with at least ten employees where 60% of the employees have no prior work experience within three years of graduation or any vocational program have access to percentage-based tax relief.
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